Rare earth elements are moving rapidly to the forefront of global policy making for energy, transport, advanced manufacturing and digital technologies as demand continues to expand while supply chains remain highly concentrated, according to a new International Energy |Agency (IEA) report developed to inform G7 discussions this year.

The importance of the 17 rare earth elements that underpin a wide range of technologies – from electric vehicles and AI data centres to robotics and defence systems – has grown sharply in recent years, driven largely by growing use of high-performance permanent magnets. Demand for magnet rare earths – notably neodymium, praseodymium, dysprosium and terbium – has doubled since 2015 and is projected to increase by more than 30% by 2030, according to the new report, ‘Rare Earth Elements: pathways to secure and diversified supply chains’.

As automation and digitalisation accelerate, the report shows that demand for magnet rare earths will grow further beyond the end of this decade, based on today’s policy settings.

Achieving secure and resilient rare earth supply chains will require a comprehensive and coordinated approach, according to the report. Given the geographic distribution of resources, capabilities and industrial demand, no single country can build fully integrated value chains in isolation. Strengthened international cooperation will be essential to align investment and support project development, based on more diversified and sustainable supply networks.

The report outlines eight practical actions to support diversification, including strengthening emergency preparedness, scaling up investment across key stages of the value chain, accelerating both supply side and demand-side innovation and improving price transparency.